Tariffs hit home: NKY businesses adjust to life under tariff policy

Kara Acri, owner of Covington-based Scarlet Begonia’s Flower Truck, wrestled with the decision to charge a 10% service fee on all her flower sales.

The rationale? Tariffs.

She told LINK nky the decision made her “sick to her stomach,” but ultimately, as a small business owner, she couldn’t avoid it.

“It was a tough business decision for me to make,” Acri said. “It’s something that I’ve said in messages to our customers. It’s made me sick to my stomach. It’s not something that I want to do or wanted to do.”

Tariffs are essentially a tax placed by a government on imported goods. The 10% service fee represents a pass-through charge resulting from a 10% tariff imposed by the Trump Administration on imports worldwide. The administration has said the goal of these tariffs is to encourage American consumers and businesses to purchase more domestically produced goods, thereby motivating companies to increase manufacturing within the United States. The universal tariffs went into effect on April 5.

However, experts warn that tariffs will lead to higher prices for businesses importing goods and their consumers. A critique of the universal tariffs is that some businesses may be forced to pass the cost of the tariffs on to their customers. Locally, some small business owners, such as Acri, are worried the tariffs will place undue financial pressure on their enterprises.

Acri sources her flowers from Cincinnati Wholesale Florist, a company that imports flowers from around the world, then sells them wholesale to buyers in the area. Acri said that much of the inventory that Cincinnati Wholesale Florist comes from Ecuador, Colombia, Peru, Mexico and Canada – all countries whose exports are impacted by the tariffs. Her wholesaler sells flowers grown in the United States, but the bulk of them are sourced from other countries. 

“That’s what’s impacting my business right now, because obviously those tariffs are being applied to what my wholesaler imports, and unfortunately, that’s where I had to make the decision to apply a service fee, because I simply can’t afford to absorb that increase in cost as a result of the universal tariffs remaining in place,” she said.

While some larger businesses with greater financial resources may be able to absorb tariff costs, small businesses with tighter margins are forced to pass on the costs to customers in order to stay afloat.

Acri said that if and when the tariffs are rescinded, she would immediately slash the 10% service fee.

Besides flowers, other small businesses, such as coffee shops, are finding it difficult to navigate through the plethora of tariff announcements. Over the past couple of years, coffee prices have increased due to several factors, including global supply chain disruptions caused by weather events, labor shortages and weak crop yields. Now, tariffs threaten to raise domestic prices of coffee even higher.

Alejandra Flores, owner of Unataza Coffee in Dayton, explained that almost all coffee beans are farmed and produced internationally in warm-weather countries like Vietnam, Brazil, Colombia and Indonesia. The United States produces a small fraction of the world’s total supply, or less than one-tenth of 1%, according to an analysis published by the US Department of Agriculture’s Economic Research Service. In fact, Hawaii is virtually the only state in the US that produces coffee. 

Conversely, the United States is the second largest importer of unroasted coffee beans in the world behind only the European Union. The United States imports 99% of its total coffee supply, according to the National Coffee Association. 

Due to the domestic industry’s reliance on imported coffee, costs are expected to increase. The Trump Administration levied a 10% tariff on imports from Brazil and Colombia. Imports from Vietnam were tapped with a 46% tariff. Brazil, Colombia and Vietnam are the three largest coffee suppliers to the United States.

“Your espresso drinks are going to go up,” Flores said. “Your drip coffee is going to increase.”

Flores mentioned that other expenses associated with running a coffee shop are also increasing. This includes payroll software, plasticware and food such as eggs and whole milk.

“There are expenses that you need to cover as a business,” she said. “Unfortunately, that is going up, too.”

Northern Kentucky Chamber of Commerce President Brent Cooper said the organization is closely monitoring the tariff situation and is actively working on a public response. Behind the scenes, Cooper said that local businesses are having a tough time navigating the unpredictability of the tariff rollouts.

“We’ve seen major back-and-forth changes regarding tariffs, and as a result of the unpredictability of the situation, we’ve got people who are holding back projects, delaying projects, and people are trying to navigate which way to go from here,” Cooper said. “There’s just a lot of uncertainty, and that’s just a killer for businesses.” 

Cooper said that many Northern Kentucky business leaders are aligned with many of the Trump Administration’s policy aspirations, such as securing the southern border, mitigating the flow of fentanyl and reinvesting in American manufacturing.

However, he noted that many local business leaders would prefer a business climate that is “fair, simple, and predictable” so they can have adequate time to adjust to the shifting economic landscape.

“Here in Northern Kentucky, we make things, and we move things, and whenever there are higher taxes or higher costs, it has a negative impact on our economy, and on those two sectors in particular,” he said.